Big Tech attacks tough EU measures to tackle its market power

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The world’s largest tech companies have attacked tougher-than-expected measures unveiled within a landmark EU law aimed at curbing their market power.

Big Tech companies like Facebook and Amazon will be forced to pay up to 20 percent of global revenues for repeated violations and even risk being broken up if they violate the new Digital Markets Act once it comes into effect in October.

Those measures, unveiled late Thursday night, represent tougher sanctions for tech groups than they’d hoped, in legislation that represents the largest overhaul of the laws governing their operations in more than two decades.

Apple said the new law will “create unnecessary privacy and security concerns for our users, while others will prohibit us from charging for intellectual property in which we invest heavily.”

Google said: “We are concerned that some of these rules could reduce innovation and choice for Europeans.”

As the Financial Times reported earlier this week, the EU confirmed that the legislation would target companies with a market capitalization of at least €75 billion and running one major online “platform” service, such as a social network or a web browser.

The DMA will force so-called gatekeepers to open up their platforms to competitors, for example by forcing the companies to ensure that their services are “interoperable”. This means, for example, that users of Facebook’s WhatsApp service can send messages directly to communication apps of smaller rivals.

EU lawmakers defended the new rules after years of criticism that existing antitrust mechanisms were too slow and ineffective.

Cedric O, France’s digital economy minister and a central figure in drafting the legislation, said: “The security argument has been and always will be the argument of dominant companies to hinder innovation and increased competition.”

He said other sectors, such as banking and energy, had expressed similar concerns about damaging innovation when they were regulated, but stressed that the DMA would achieve the opposite. “More competition drives more innovation and this is exactly what will happen,” he said. “It’s very good news for European innovators and start-ups.”

Companies that have repeatedly broken the law can even be banned from acquiring companies for a temporary period under the new legislation. Technology companies will also no longer be allowed to rank their own services at the expense of competitors, and there will also be restrictions on the use of user data.

Margrethe Vestager, the EU’s executive vice president in charge of digital policy, said the new law “shows democracy’s willingness to say ‘we’ll keep this in check. We’ll make sure the market is open and arguable’.”

Thierry Breton, the French commissioner in charge of the internal market, added: “It used to be the wild west. That is no longer the case. We are taking back control.”

A deal on the DMA came hours before the US and EU announced a preliminary deal on privacy requirements for tech companies that send data across borders.

US President Joe Biden said the framework underlined a shared commitment to privacy, data protection and the rule of law, adding that it would allow the European Commission to once again allow transatlantic data flows worth $7.1 trillion. in economic relations with the EU.

Additional coverage by Sam Fleming in Brussels

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